BANKRUPTCY LAW 2014 LEGAL GROUNDS FOR DEBT COLLECTION

According to the Bankruptcy Law 2014 (Clause 3, Article 4), creditors can be individuals, agencies or organizations; and the creditors can be unsecured, partially secured or secured. The Bankruptcy Law 2014 (Clause 1, Article 5) allows unsecured and partially secured creditors to file a petition for proceeding of bankruptcy before a competent court. The time to file the petition for the proceeding of bankruptcy is after 03 (three) months from the overdue debt , but the debtors fail to perform the payment obligation, regardless of whether value of the debt is small or big.

With the above legal grounds, many enterprises have applied the Bankruptcy Law 2014 to recover the debt. When the creditors fail to pay the debt within the period above, the creditors file a petition for the proceeding of bankruptcy in order to put high pressure on the debtors to pay. Pursuant to the Bankruptcy Law 2014, the Court may issue a decision for openning the proceeding of bankruptcy. Since then, the debtors have beenfaced to the proceeding of bankruptcy. At that time, its business activities are subjects to the supervision of the Judge and the Liquidator. In particular, legal representatives of the debtors can be changed if it is deemed incapable of managing and shows signs in violation of law (Article 47). In addition, after a decision is made for the proceeding of bankruptcy, many activities of the debtors are prohibited such as hiding, dispersing, donating assets, paying unsecured debts or giving up the right to collect debts. They will be placed in legal bankruptcy and its debts will come due together. Even the debtors might bedeclared to be bankrupted by a court decision and accordingly, they might be terminated from business altogether.

When considering applying this solution, the creditors have to collect information relating to the situation of production and business activities as well as debt payment ability of the debtors. This is considered as an effective method in the debt recovery, if the debtors are not due to the inability to pay the debt, but deliberately delay the repayment.

On side of the debtors, facing to the pressure of debt payment or to the legal consequences of proceeding of bankruptcy, the debtors forced to decide. In case the debtors have still enough their ability of the debt payment, they will choose to pay the debt to avoid legal issues, legal costs and the loss of business opportunities.

If the debtors make payment, it means that the creditors have effectively collected the debt on the basis of the provisions applying of the Bankruptcy Law 2014.